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SEPTEMBER 2005

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MID-ATLANTIC REGIONAL REVIEW



Smaller is Better

by RON STARNER
Cozy communities, tiny technologies spell formula for growth in Middle Atlantic region.
Delaware Gov. Ruth Ann Minner, named Governor of the Year in 2004 by the Biotechnology Industry Organization, hopes new business tax cuts will prompt more growth like the state has seen on the U.S. headquarters campus of AstraZeneca, above, in Wilmington.



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ne of the smallest states in the country is leading the way in biotechnology growth, and smaller communities throughout this state's region are finding new plant success where others failed.
      In Delaware, Maryland, Virginia and the District of Columbia, it seems, smaller really is better. No one knows this better than Delaware Gov. Ruth Ann Minner, who last year was named Governor of the Year by the Biotechnology Industry Organization.
      "Delaware is small, and we use that to our advantage," the Democratic governor tells Site Selection. "When we bring corporate site selectors to visit Delaware, we gather 40 to 50 business leaders from around the state to sit down with these prospects, have dinner with them and talk. It is also easy to visit our available sites."
      Delaware has used its "smallness" — a population of 835,000 spread out over only 1,954 sq. miles (5,061 sq. km.) — as an effective recruiting tool. Last year, the state landed a $27-million plastics manufacturing plant from EVC Films in Newark, where the state also secured a $10-million solar power factory from GE Energy. EVC will employ 125 workers; GE will employ 300.
      The largest job-creation projects in Delaware last year came in the state's more traditional industry sectors: banking and insurance. Juniper Bank announced a 780-worker expansion in Wilmington, while AAA Mid-Atlantic announced a new 850-job headquarters facility, also in Wilmington.
      It's in the non-traditional industries, however, where Gov. Minner believes Delaware's economic future lies. The state's New Economy program aims to invest in emerging technology firms through a creative combination of seed funds, federal grants and university partnerships.
      One of Delaware's newest assets for recruiting and growing tech firms is the state's Technology Court, where high-tech companies can go to mediate disputes over patents and intellectual property rights before going to state court."People go there and settle their differences privately without the press. They do it without having to face formal legal judgments. Most companies like the fact that this Technology Court doesn't get a lot of media attention," says the governor. "It has been active for two years and it's been very successful."
      As a result of these and other biotech business-friendly policies, Delaware recently secured major investments from DuPont, AstraZeneca and other drug and chemical companies — with more on the way.
      "DuPont committed $80 million in R&D to Delaware and gave the state 250 patent packages they have decided not to work on any longer," Minner says. "Many of these new technologies will turn into successful companies. We can do this because we are the No. 1 state per capita for scientists and the No. 2 state per capita for patents. Plus, we significantly cut our business tax rates on June 30 — the new lower tax rates for companies doing business here will take effect January 1. Our gross receipts tax was cut for most businesses by 25 percent. Auto manufacturers will get a 25-percent tax cut. About 14,000 companies will not pay any tax at all. Many will pay just $197 a year."
     

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